Alphabet (GOOGL) Stock Slides 7% — But One Analyst Sees 41% Upside

TLDR

• Alphabet stock fell 3.4% Thursday to $280.92, its lowest close since November 2025, after a jury ordered Google and Meta to pay $6 million in an addiction lawsuit
• GOOGL slipped a further 1.2% Friday to $277.70, putting the stock down more than 7% for the week
• Wells Fargo raised its price target on Alphabet to $397 from $387, maintaining an Overweight rating
• The bank cited TPU chip licensing to Anthropic and the $32 billion Wiz acquisition as new revenue drivers
• Analyst Ken Gawrelski said Alphabet “has all the pieces necessary to be an AI winner”

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Alphabet dropped 3.4% Thursday, closing at $280.92 — its lowest level since November 14, 2025, per Dow Jones Market Data. The stock slipped again Friday, falling 1.2% to $277.70.

Alphabet Inc., GOOGL

Thursday’s drop came after a jury ruled against Google’s YouTube and Meta in a lawsuit brought by a young woman who accused both platforms of designing their apps to be addictive. The jury ordered the two companies to pay $6 million to the plaintiff. Meta fell nearly 8% Thursday and was down another 1.5% Friday to $539.20.

The sell-off puts Alphabet on pace for a weekly loss of more than 7%.

Despite the pressure, Wells Fargo came out with a bullish note Friday morning. The firm raised its price target on Alphabet to $397 from $387, keeping its Overweight rating intact. That new target represents 41% upside from Thursday’s close.

Wells Fargo Points to New Revenue Streams

Two moves stood out to the team. First, Google’s licensing of its tensor processing unit chips — known as TPUs — to Anthropic. Second, Alphabet’s $32 billion cash acquisition of cloud security firm Wiz, which closed March 11.

Wells Fargo estimates TPU licensing will add 4% to Google Cloud Platform revenue in 2026, rising to 7% in 2027. On the operating income side, the bank sees a 6% boost in 2026 and 14% in 2027. The Wiz deal is expected to add meaningfully on top of that.

Analyst: Alphabet Has What It Takes to Win in AI

That’s a pointed statement given the pressure Google Search has faced from AI-powered rivals over the past year.

Alphabet’s stock is now down more than 17% from its 52-week high. The Wells Fargo note puts the current price at a steep discount to where the bank sees fair value.

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